Please answer qu. 1 & 2 Exercise 1 (A Malthusian Economy). Modify Solow model II (with population growth) presentedin lecture 6 as follows. Assume that output is produced with land and labor, instead of capital andlabor. Specifically, suppose that the production technology is of the formY, = TªL-a, where Tdenotes a fixed amount of land, L,denotes labor, and 0 < a < 1 is a parameter. Suppose that thenumber of workers grows at the rate n > 0 per period, that isLe+1= (1 + n)L,. In this economy,there is no physical capital, and output is not storable. In answering the following questions, showyour work.1. What is the growth rate of output.2. Find consumption per worker in period t as a function of L,.3. Find the growth rate of consumption per worker and provide an intuitive explanation offinding.your4. Explain why consumption per worker grows at a different rate than in Solow model II (withpopulation growth) studied in lecture 6.

***Since the student has asked for some specific subparts to be solved, the expert is required to…

Exercise 1 (A Malthusian Economy). Modify Solow model II (with population growth) presented in lecture 6 as follows. Assume that output is produced with land and labor, instead of capital and labor. Specifically, suppose that the production technology is of the formY = TaL-a, where T denotes a fixed amount of land, Ledenotes labor, and 0 < a < 1 is a parameter. Suppose that the number of workers grows at the rate n > 0 per period, that isLt+1= (1 +n)Lt. In this economy, there is no physical capital, and output is not storable. In answering the following questions, show your work. 1. What is the growth rate of output. 2. Find consumption per worker in period t as a function of Lt.

Exercise 1 (A Malthusian Economy). Modify Solow model II (with population growth) presented in lecture 6 as follows. Assume that output is produced with land and labor, instead of capital and labor. Specifically, suppose that the production technology is of the formY = TaL-a, where T denotes a fixed amount of land, Ledenotes labor, and 0 < a < 1 is a parameter. Suppose that the number of workers grows at the rate n > 0 per period, that isLt+1= (1 +n)Lt. In this economy, there is no physical capital, and output is not storable. In answering the following questions, show your work. 1. What is the growth rate of output. 2. Find consumption per worker in period t as a function of Lt.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter1: Introducing The Economic Way Of Thinking

Section: Chapter Questions

Problem 7SQP

See similar textbooks

Similar questions

D2) Economics In the R program, with what code is the vector outoregressive model found? (for daily return)
By using the concept of the Heckscher-Ohlin model, and information assumptionsbelow this i. Two factors of production, namely Labor and Landii. Two production goods, namely Cloth and Foodiii. Cloth production is labor intensiveiv. Food production is land intensivev. The rest are other HO assumptionsvi. aLC, aTC, aLF, aTF, and a*LC, a*TC, a*LF, a*TF areLabor and Land input units used for the production of eacheach Cloth and Foodvii. w is the factor price of Labor and r is the factor priceLand production a) Show that Cloth is a commodity that is labor intensive and Foodis a land intensive commodity?k) According to the Stolper-Samuelson Theorem, an increase in the relative price of outputPC/PF, how does it affecta) The relative income of the factors of production Labor and Land or w/r?b) Land/Labor Ratio? l) According to the H-O Model, a country has a comparative advantagein producing a commodity when? Give an example. m) According to Rybczynski theorem with an increase in the factor of…
Consider now the two-period model in general equilibrium, so that prices, investment, and labor supply are endogenous, i.e. the production economy. Analyze and carefully explain graphically and in words the general equilibrium effects of a decrease in TFP for a benchmark economy with no frictions.
What is the ans for PURE specific and the ans for MIXED specific. Pls give explanations for the differences between these two models. (p/s this is the 3rd time I'm asking this question bcos your team did not answer my question of Pure AND Mixed but just specific factors model in general) PLEASE HELP ME THANKSSSS In the Pure Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific to C and Land (A) is specific to W. If the government imposes a tariff on the imports of W then... In the Mixed Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific to C and Land (A) is specific to W. If the government imposes a tariff on the imports of W then... A. Both owners of K and owners of A will benefit. B. Owners of A will benefit. C. Owners of K will benefit. D. Neither owners of K nor owners of A will benefit.
The South African Rand flactuates widly on a daily, weekly, monthly basis. Identify all the variables that would be used in an econometric equation that estimates the relationship between South african economic growth and exchange rates (dollar to rand). appraise each variable that is included in the model using economics theory and briefly discuss the tests used to ensure model is statistically sound.
3. Write the theoretical model speciation of a logit model?
Suppose in our model, lifespans increased due to a productivity in- crease. What would likely happen to hours worked and leisure over the lifetime of a representative consumer. (a) Let’s consider one of two common ways of implementing this change. Suppose the increase raised both lifespans and the amount of years consumers are healthy enough to work by the same amount, how would that likely affect the measured numbered of hours work by prime aged adults within a given year? What would likely hap- pen to the retirement age? (b) Let’s consider the other way to implement it. Suppose the change in lifetimes came about changes in technology that delayed death but did not extend the amount of years consumers are healthy enough to work. What would likely happen to hours worked within a year? What would happen to the retirement age? (c) In the US, the generalized stylized fact is that the actual age of retirement is not increasing. Nor are hours worked per week. Why are both of the…
The Black Death: (a) Wages were higher after the Black Death because of diminishing returns. Our production model exhibits diminishing returns to labor: each additional unit of labor increases output by less and less. So if the amount of labor is reduced, the marginal product of labor — and hence the wage — increases. The reason is that capital stays the same: each remaining worker is able to work with more machines, so his productivity rises. In fourteenth-century Europe, the marginal workers could move to better land and discard old broken-down tools. Graphically, this can be seen by considering the supply-and-demand diagram for labor in Figure 4.2(b). If the supply of labor shifts back (because a large number of workers die), the equilibrium wage rate increases. Draw this graph — including the shift in the labor supply curve — to see the result for yourself. Mathematically, the result can be seen in the solution for the wage rate in our production model,…
2. Solow-Swan Model (a) You will demonstrate the importance of diminishing returns to capital in the Solow-Swanmodel. Draw a Solow-Swan diagram in which there are constant returns to capital. Thiswould happen if the production function were Yt= AKt, where A = 1. Furthermore,assume that the sum of population growth and the depreciation rate is greater than thesaving rate. Does the economy converge to a steady state in this case? To answer thisquestion, you should draw a Solow-Swan diagram in terms of output per person, as we didin class. Use this diagram to explain why the economy converges to a steady state or doesnot. (b) Assume, instead, that the sum of population growth and the depreciation rate is equal tothe saving rate. In this case, are there any steady states? If yes, describe the steady-statelevels of capital per person. If no, explain why not. (Note: Diagram is not needed for thispart.)
1. Expain in detail a) What are Computable General Equilibria Models? b) Can a country enacting a tariff have a portion of that tariff paid by foreign producers? If yes, why & show it by using an appropriate diagram.
(a) Consider an economy that is initially in a steady state equilibrium. Assume that in this equilibrium it has a saving rate of 50 per cent and a depreciation rate of 2 per cent. Further assume that the population growth rate is 3% and that the level of output produced can be represented by the following production function: = where A = 1 and = 0.5. Use the Solow-Swan model to determine the level of capital per worker and output per worker in this economy. (1 mark) (b) Now suppose the government introduces a set of policies to improve the institutional set up as well as better production technique which increases total factor productivity by double. What is the new steady state level of capital per worker and output per worker? (1 mark) (c) Use a Solow-Swan diagram to show the qualitative effects of this new government policy upon steady state output per worker and capital per worker. Briefly describe the intuition behind this result. (1 mark) (d) Now suppose, population growth rate…
answer all! Consider the Endogenous Growth Model with the representative consumer. The efficiency parameter of human capital accumulation technology is b = 5. The total productivity factor is given by z = 60. Denote by Ht the human capital accumulated in period t, and by ut the time spent working in period t. Assume u0 = 0.85 and H0 = 1. 1. Compute the consumer consumption Ct for periods 0 and 1. 2. Starting from year 2, the government applies a policy that raises b to 9. Now assume that in face of this increased value of human capital in the economy, the consumer responds optimally by decreasing ut to 0.75. Calculate the consumption Ct for periods 2 and 3.